* Garuda Q1 loss $98.5 mln vs $1.02 mln profit a year ago
* Airline struggled with fuel costs, lower passenger yield
* Garuda to control fuel expenses through hedging - CEO (Adds comment from CEO, financial details)
By Cindy Silviana and Eveline Danubrata
JAKARTA, April 28 (Reuters) - Higher fuel costs tipped Indonesian state-controlled airline PT Garuda Indonesia Tbk into a first-quarter net loss of $98.5 million, its chief executive said on Friday.
Garuda, which this month appointed former banker Pahala Mansury as CEO to revive its fortunes, had reported a net profit of $1.02 million in the same period last year.
Apart from greater fuel expenses, the airline also faced tough competition, Mansury said. "Our passenger yield declined even though we carried more passengers," he told reporters.
Garuda would now focus on "putting a lid on fuel costs" through hedging and optimising its fleet and routes, he added.
Garuda's competitors include regional airlines such as Malaysia's AirAsia Bhd and Singapore Airlines Ltd , as well as private Indonesian carrier Lion Air.
The Indonesian government owned 60.5 percent of Garuda as of the end of 2016, Thomson Reuters data showed.
The appointment of Mansury as CEO was expected to boost Garuda's credibility among creditors, a senior official at the state enterprises ministry had earlier said.
Mansury previously oversaw finance and treasury at Indonesia's biggest bank by assets, PT Bank Mandiri Tbk , which is also state-controlled.
Garuda shares closed 1.1 percent lower on Friday, underperforming the broader Jakarta stock exchange, which was down 0.4 percent. (Reporting by Cindy Silviana and Eveline Danubrata; Editing by David Goodman/Adrian Croft/Alexander Smith)